Plutocrats Call for Debt Relief to Avoid Paying Share of Taxes

Unless working-class Americans take astand against Wall Street’s latest tax evasionscheme, the gap between the richand the poor could become unbridgeable. “Fix the Debt” is an insidious new media and lobbyingcampaign being financed to the tune of $60million and supported by the nation’s largest corporations and financial service firms.

Though touted as a strategy tobalance the U.S. budget throughmoderate spending cuts and minortax increases, a report by the Institutefor Policy Studies (IPS) reveals that the campaign’s true objectiveis to cement “a debt deal to reducecorporate taxes and shift costsonto the poor and elderly.”

According to the IPS, “the campaignis pushing for less spending on earned-benefitprograms, such as Social Security and Medicare,while promoting a rash of corporate tax breaks as part of what they call ‘pro-growth tax reform.’”

The authors of the report define “pro-growth taxreform” as “Washington speak” for replacing existingcorporate tax rates with a “territorial tax system” that permanently exempts U.S. companies from payingtaxes on all revenue generated overseas.

In other words, if the Fix the Debt lobbyists aresuccessful in getting Congress to back their proposal,the same companies that moved their operations oversees and replaced American workers withforeign employees would not only be allowed tocontinue paying slave wages, but they would also have the added benefit of not having to pay any federalincome tax on profits they bring back to the U.S.

To make up for this lost tax revenue, Fix the Debtstrategists propose “reforming” social-safety-net programs that mostAmerican workers pay into every day—Social Security, Medicare andMedicaid. IPS speculates that thiswill mean limited access to thesebenefits and yet another raise in the retirement age. This would have adevastating impact on many retirees,the disabled and others whoare struggling to survive on a fixed income.

Those calling for austerity measures as a solution to the U.S. debt crisis are the one’s largely responsiblefor it. Among the executives who sit on the campaign’s CEO Fiscal Leadership Council are LloydBlankfein of Goldman Sachs and Jamie Dimon of JPMorgan Chase & Co., whose predatory lending practices contributed to the financial meltdown of 2008.

“The companies represented by executives workingwith the Campaign to Fix the Debt have receivedtrillions in federal war contracts, subsidies and bailouts, as well as specialized tax breaks and loopholesthat virtually eliminate the companies’ taxbills,” says Christine Wilkie of The Huffington Post.

Multibillionaire Pete Peterson is the driving forcebehind the Fix the Debt campaign, and has spentnearly half a billion over the past five years lobbying for dramatic cuts in Social Security andMedicare.

Peterson served as U.S. secretary of commerceunder Richard Nixon, chaired the Federal ReserveBank of New York during the George W. Bush administration and was instrumental in the appointmentof tax cheat Timothy Geithner to the post ofTreasury secretary under Obama.

But Wall Street is where Peterson made his fortune. As founder and chairman of the BlackstoneGroup, he groomed the company into one of theworld’s largest private equity firms by exploiting a little-known tax break that allows investment managersto pay a mere 15% tax on their incomes, compared to the 35% most top earners pay.

So far, the Fix the Debt campaign lists 86 participatingCEOs on its website. Of those, IPS analyzed63 publicly held corporations and found that they potentially stand to reap $134B in tax windfallsif Washington adopts their proposal.

According to the report: “The biggest potentialwinners are General Electric, which could reap a taxwindfall of as much as $35.7B on its overseas earnings stash of $102B, and Microsoft, whichcould garner a savings of $19.4B on its $60.8B in accumulated foreign earnings.”

It is no coincidence that the Fix the Debt proposalcomes just as the Bush tax cuts are set to expireat the end of this year. But, as good as they had it in the past, many of the Fix the Debt CEOs saythey are willing to give up the Bush tax cuts in favorof a territorial tax system and other tax breaks.

According to the IPS: “If their companies savebillions in tax dollars, corporate profits will soar—and CEO pay will skyrocket too. The small amount of additional personal income tax they might paywould be more than offset by higher bonuses.”

Keith Johnson in an investigative journalist and host of the Revolt of the Plebs radio program.

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